Ask Steve Dave Farm And Cow And Ranch And Tractor And Truck Related Questions

[steve dave]

The technically averse just listen to the markets at noon before Paul Harvey while they are eating a bologna sandwich.

I don’t think anyone does this anymore. I know shitloads of farmers and they are on avg more technically savvy than the average human I know all else equal.

Wouldn't necessarily argue this, but how available is internet service/signal vs AM radio in bumfuck SW Kansas?

Like, super good

[Katpappy]

The technically averse just listen to the markets at noon before Paul Harvey while they are eating a bologna sandwich.

I don’t think anyone does this anymore. I know shitloads of farmers and they are on avg more technically savvy than the average human I know all else equal.

Wouldn't necessarily argue this, but how available is internet service/signal vs AM radio in bumfuck SW Kansas?

Like, super good

Agree completely.  It's satellite, so it don't give a crap where your at as long as there's nothing in the way of your device and the sky.

[KST8FAN]

https://bushelpowered.com/

Most all grain elevators have a phone app or are moving towards something similar to the link.  You can get pricing, contract info, truck ticket info.

Moving towards price alerts and GPOs (grain price orders) where if SD would sell 10k bushels at $7 for his corn he can enter a GPO and if the elevator bid gets there it would book the contract.


Tom

Sent from my SM-G973U using Tapatalk

[schreds21]

Hmmmm, no more bologna sammiches with markets and Paul Harvey on KSAL huh?  End of an era I guess.  Sad.

[ben ji]

Benji, pretty much anyone that can meet and maintain the account minimums can trade futures, cattle or otherwise.  Some of the author’s assertions sound like a bad episode of Yellowstone.  If you want more details, given I am off today, I thought I would expand on the article.  Otherwise, stop here.

I know this is overkill and not the question Benji asked, but after working in the industry for years to see things so poorly explained in articles like this just frustrate me to no end.

This article is a hot mess, IMHO.  The author mentions the following:
System is rigged in favor of big meat over ranchers
Volatility of the pandemic created historically bad prices for ranchers
Ranchers don’t get their fair share of the boxed beef dollar
Formula contract pricing reduces competition and price transparency for ranchers
Only speculators contribute to futures price increases for cattle (just LOL)

If you want to write that article, then write that article.  There are hundreds of them out there.  Not going to debate any of those positions here, but I do question how what happened to the Easterday Ranch relates to any of the above points.

Easterday was not some struggling rancher who lost grandpa’s 160 acres the family had owned since the 1880’s.  It was one of the largest, most diversified farming operations in the PNW.  Given its size and longevity, I suspect Easterday was a very viable operation thru good times and bad. 

Outside of Cody being the antithesis to Hillary Clinton’s cattle futures trading experience the explanation of how cattle futures work is just terrible.

LC futures- Live Cattle futures, contract size 40,000 lbs
Roughly 30-35 head of fat cattle weighing 1200-1250 lbs ready for slaughter.  Basically a “pot load” of cattle in the shiny, aluminum, double decked (pot belly) cattle trailers on the highway.  Actually, not shiny, but covered in runny, corn laden cattle crap.

FC futures- Feeder Cattle futures, contract size 50,000 lbs
60-65 head of feeder cattle weighing 700-750 ready for the feedlot to be fattened for the kill (see above).  Again, this is about a truck load.  Note if you have 65-70 head to load you can damn sure bet SD dad or Tom dad would get those boys on the truck with a note to the driver to avoid the KDOT scale house on the way to the feedlot.

The author mentions only buying a futures contract from a “stockbroker.”  You buy AND SELL futures contracts, and you do it on margin.  Probably like $1,500 will allow you to buy or sell a contract worth $50-60,000.  If the price goes in your favor you build equity.  If the price moves against you then a margin call requires you to put in more money.  See the boys in the investing thread if any questions.

Basic Hedge example using their numbers:

This is highly simplified ignoring basis (differences between futures and cash price, discounts, delivery periods, etc).  It even ignores the fact you can hedge the feed costs (second biggest expense next to the animal) using grain futures.

Buy feeders to put on feed with a breakeven of $1.30.  You SELL futures contract for $1.34 to lock in the $.04 margin. 

Cattle are fat and cash/futures are at $1.50 (prices go up)
Sell cash cattle for $1.50 - $1.30 breakeven you make $0.20 on cash
BUY back futures at $1.50 - $1.34 original sale you lose $0.16 on futures*
Net you made your $0.04 margin

*note must meet margin calls to keep your short sale to end of the trade

Cattle are fat and cash/futures are at $1.20 (prices go down)
Sell cash cattle for $1.20 - $1.30 breakeven you lose $0.10 on cash
BUY back futures at $1.20 - $1.34 original sale you make $0.14 on futures
Net you made your $0.04 margin

Cody was not hedging in any sense of the word.  My guess is he was putting on a “Texas hedge.”  He was long cash cattle and probably long cattle futures in the hopes of doubling up.  Bottom line he was really bad at speculative trading of cattle futures.  He had/has a serious gambling addiction.  He could have as easily been losing millions at a casino.

Yes the cattle sector has went thru some very tough times.  Ranchers and farmers are honest, hard working folk.  However, they are human and prone to greed and corruption just like everyone else.  I just feel like maybe that’s more of the story here.

The author also states futures and scale are the only way to survive in the cattle industry.  For the subsidy crowd here USDA offers multiple programs for price protection in the livestock sector.  There are other ways to manage the risk outside of futures.

https://www.rma.usda.gov/Policy-and-Procedure/Insurance-Plans/Livestock-Insurance-Plans


Tom

Here is an interesting article I ran across about a ranch/farming operation in Washington.

https://www.hcn.org/issues/53.12/ranching-betting-the-ranch

It's a really good article but the part that caught my attention was the son saying "I pissed it all away on the merch" trading cattle futures and being really bad at it. Basically the profit from a cow that goes to a rancher has been decreasing for years due to consolidation in the meat packing business and the kid got drunk on trading cattle futures, started a whole fraud thing then got even deeper in a deep hole and couldn't get out.

In the article they mentioned you had to have X amount of cattle before you can trade on the futures market. Does the SD fam or anyone else have enough cattle to shed light on how this works?

sddad trades cattle and crop futures all the time. I don’t recall a day I have been around him when he wasn’t talking on the phone with his commodities guy at least once. I am not aware of any barrier to entry to doing it but I never asked obviously.

Ben ji-
Feeder cattle contracts trade in 50,000 lb contracts, live cattle trade in 40,000 lb contracts. If you are planning to sell 800 lb feeders steers after you have fed/grew them you would basically need 62 head that would be selling at the same time to match up with your contract that you would have in place for the month you will be selling in. If selling 1300 to 1350 lb fat/finished steers you would need approximately 30 head selling at once. You can place as many or as few of contracts you need to cover the cattle/pounds you will be selling. Assuming there is enough liquidity / volume interest in the contract month you are trading to get someone to offset your positions at the price you are trying to put a contract on at.

Thank you for the responses, once again ben ji learns something useful about farming from a kansas state wildcats sports message board.

[steve dave]

To get this convo on track in the right thread

Now I'm totally sidetracking this thread but I can't think about overalls without also discussing 5-buckle boots? Who grew up wearing these things? They would invariably spring leaks and get filled with icy slime when feeding cows during the winter. Muck boots were a quantum leap forward over these.

Had a pair of these from a western store.  They had pointed toes for cowboy boots although I didn't own boots.


Tom

Sent from my SM-G973U using Tapatalk

we had tons of these. all just black. and they were critical because when you are working cattle (we used "working cattle" to mean doctoring them and sorting out sicks and whatnot) in large numbers you are eventually just wading through cow poop a foot deep if you had the jobs I sometimes had (guy who makes the cows move up into the shoot barrel for me to move the giant wheel thing to smoosh them into the lane to eventually get to the chute before then reloading the giant barrel with more potentially sick cows). This is all high level cow farmer stuff that should be posted in that thread tbh.

[Sandstone Outcropping]

To get this convo on track in the right thread

Now I'm totally sidetracking this thread but I can't think about overalls without also discussing 5-buckle boots? Who grew up wearing these things? They would invariably spring leaks and get filled with icy slime when feeding cows during the winter. Muck boots were a quantum leap forward over these.

Had a pair of these from a western store.  They had pointed toes for cowboy boots although I didn't own boots.


Tom

Sent from my SM-G973U using Tapatalk

we had tons of these. all just black. and they were critical because when you are working cattle (we used "working cattle" to mean doctoring them and sorting out sicks and whatnot) in large numbers you are eventually just wading through cow poop a foot deep if you had the jobs I sometimes had (guy who makes the cows move up into the shoot barrel for me to move the giant wheel thing to smoosh them into the lane to eventually get to the chute before then reloading the giant barrel with more potentially sick cows). This is all high level cow farmer stuff that should be posted in that thread tbh.

Thanks for getting this into the right thread, sd.

Working cows. Dad and grandpa kept cows in a couple of places where they and the landlord were all too cheap to invest in decent pens and so we had a system of portable panels and pipes that would be used to advance the cows toward the headgate. Also, sometimes the cows would crowd into the corner and refuse to be "worked." They've upgraded to a less deadly system since I left home but I don't really miss that part of farm life.

[KST8FAN]

Tater surveying his domain which is the farm.  The shy little puppy exits the truck and announces his arrival.  Drove out at noon to take care of a couple items. 

He knows when I put on the boots and Carhartt it's farm time.  Turns circles and barks at the door ready to go.

Tom

Sent from my SM-G973U using Tapatalk

[ben ji]

Tater surveying his domain which is the farm.  The shy little puppy exits the truck and announces his arrival.  Drove out at noon to take care of a couple items. 

He knows when I put on the boots and Carhartt it's farm time.  Turns circles and barks at the door ready to go.

Tom

Sent from my SM-G973U using Tapatalk

Does tater ever try and dive head first into coyote or badger dens?

I randomly plan to own a wiener dog at some point in my life just because I think they are cool but I was just thinking about how if I get one and take it out to the cat ranch it will probably dive into one of the 25 badger/coyote dens and eventually come face to face with one.

[BW]

Benji, pretty much anyone that can meet and maintain the account minimums can trade futures, cattle or otherwise.  Some of the author’s assertions sound like a bad episode of Yellowstone.  If you want more details, given I am off today, I thought I would expand on the article.  Otherwise, stop here.

I know this is overkill and not the question Benji asked, but after working in the industry for years to see things so poorly explained in articles like this just frustrate me to no end.

This article is a hot mess, IMHO.  The author mentions the following:
System is rigged in favor of big meat over ranchers
Volatility of the pandemic created historically bad prices for ranchers
Ranchers don’t get their fair share of the boxed beef dollar
Formula contract pricing reduces competition and price transparency for ranchers
Only speculators contribute to futures price increases for cattle (just LOL)

If you want to write that article, then write that article.  There are hundreds of them out there.  Not going to debate any of those positions here, but I do question how what happened to the Easterday Ranch relates to any of the above points.

Easterday was not some struggling rancher who lost grandpa’s 160 acres the family had owned since the 1880’s.  It was one of the largest, most diversified farming operations in the PNW.  Given its size and longevity, I suspect Easterday was a very viable operation thru good times and bad. 

Outside of Cody being the antithesis to Hillary Clinton’s cattle futures trading experience the explanation of how cattle futures work is just terrible.

LC futures- Live Cattle futures, contract size 40,000 lbs
Roughly 30-35 head of fat cattle weighing 1200-1250 lbs ready for slaughter.  Basically a “pot load” of cattle in the shiny, aluminum, double decked (pot belly) cattle trailers on the highway.  Actually, not shiny, but covered in runny, corn laden cattle crap.

FC futures- Feeder Cattle futures, contract size 50,000 lbs
60-65 head of feeder cattle weighing 700-750 ready for the feedlot to be fattened for the kill (see above).  Again, this is about a truck load.  Note if you have 65-70 head to load you can damn sure bet SD dad or Tom dad would get those boys on the truck with a note to the driver to avoid the KDOT scale house on the way to the feedlot.

The author mentions only buying a futures contract from a “stockbroker.”  You buy AND SELL futures contracts, and you do it on margin.  Probably like $1,500 will allow you to buy or sell a contract worth $50-60,000.  If the price goes in your favor you build equity.  If the price moves against you then a margin call requires you to put in more money.  See the boys in the investing thread if any questions.

Basic Hedge example using their numbers:

This is highly simplified ignoring basis (differences between futures and cash price, discounts, delivery periods, etc).  It even ignores the fact you can hedge the feed costs (second biggest expense next to the animal) using grain futures.

Buy feeders to put on feed with a breakeven of $1.30.  You SELL futures contract for $1.34 to lock in the $.04 margin. 

Cattle are fat and cash/futures are at $1.50 (prices go up)
Sell cash cattle for $1.50 - $1.30 breakeven you make $0.20 on cash
BUY back futures at $1.50 - $1.34 original sale you lose $0.16 on futures*
Net you made your $0.04 margin

*note must meet margin calls to keep your short sale to end of the trade

Cattle are fat and cash/futures are at $1.20 (prices go down)
Sell cash cattle for $1.20 - $1.30 breakeven you lose $0.10 on cash
BUY back futures at $1.20 - $1.34 original sale you make $0.14 on futures
Net you made your $0.04 margin

Cody was not hedging in any sense of the word.  My guess is he was putting on a “Texas hedge.”  He was long cash cattle and probably long cattle futures in the hopes of doubling up.  Bottom line he was really bad at speculative trading of cattle futures.  He had/has a serious gambling addiction.  He could have as easily been losing millions at a casino.

Yes the cattle sector has went thru some very tough times.  Ranchers and farmers are honest, hard working folk.  However, they are human and prone to greed and corruption just like everyone else.  I just feel like maybe that’s more of the story here.

The author also states futures and scale are the only way to survive in the cattle industry.  For the subsidy crowd here USDA offers multiple programs for price protection in the livestock sector.  There are other ways to manage the risk outside of futures.

https://www.rma.usda.gov/Policy-and-Procedure/Insurance-Plans/Livestock-Insurance-Plans


Tom

Nicely done.

Sent from my SM-G975U using Tapatalk

[KST8FAN]

He has shown a lot of heeler characteristics.  I had a blue heeler growing up that had no reservations about sticking its head in any den hole.  Skunks, raccoons, rabbits, coyotes she was nuts about chasing creatures.

Squirrels put Tater into orbit.  At the farm the neighbors chickens wander over, and he  chases them, but that sausage  body and short legs work against him really catching anything.


Tom

Sent from my SM-G973U using Tapatalk

[Stupid Fitz]

He has shown a lot of heeler characteristics.  I had a blue heeler growing up that had no reservations about sticking its head in any den hole.  Skunks, raccoons, rabbits, coyotes she was nuts about chasing creatures.

Squirrels put Tater into orbit.  At the farm the neighbors chickens wander over, and he  chases them, but that sausage  body and short legs work against him really catching anything.


Tom

Sent from my SM-G973U using Tapatalk

Took my doggie to the inlaws farm a couple months back. The neighbors have a bull that is mean as crap and has to be separated from everything else because its an bad person. We were warned to keep doggie away from the fence as everyone was afraid the bull would charge and blow through the shitty fence. Inevitably, my city doggie decided to go check out this monster across the street. No one noticed for a while and when someone finally went "oh crap", we looked over and they were just staring directly at each other and gently walking along the fence. They did that the whole afternoon and everyone was amazed the bull didn't try and stomp the crap out of doggie. I like to think they became fast friends because doggie had no reason other than size to be afraid or take any of the bulls crap (bull crap), since she had never seen such a creature before. The bull prob thought doggie was a rough ridin' lunatic for coming so close and not giving a eff and figured they should be pals. More than likely the bull will kill us all the next time we are there, but who knows?

[Cire]

https://www.wibw.com/2022/01/24/secret-acres-foreign-owned-agricultural-land-inaccurately-tracked-by-government/?utm_source=twitter&utm_medium=social&utm_campaign=snd&utm_content=wibw

weird

[KST8FAN]

https://www.wibw.com/2022/01/24/secret-acres-foreign-owned-agricultural-land-inaccurately-tracked-by-government/?utm_source=twitter&utm_medium=social&utm_campaign=snd&utm_content=wibw

weird

Weird that government records don't align from Federal,state, county levels?


Tom


Sent from my SM-G973U using Tapatalk

[KST8FAN]

Anyone have Carhartt seat covers?  I do.


Tom

Sent from my SM-G973U using Tapatalk

[sys]

i wanted to get some but they don't make them to fit my vehicle.

[porky morgan]

Ben Ji--I can tell you as an owner of a mini dachsund that if you get a mini (15lb<) it'll act badass but won't dive into that kind of danger. If you get a full sized one (+/_ 30lb) it very well might win the battle. Fun fact: weiners evolved over the years with the elongated body and long snout to be able to grab a badger face-to-face and keep the badger's sharp claws out of reach of the vitals. Drag him out. German farmer whacks the badger with a shovel.

[Katpappy]

Wow, I would love to see a wiener dog fight a badger. 

[KST8FAN]

Bred cows penned up today.  Tried to introduce Tater again. 

After the initial charge and startling, dog and cows regroup and look at each other. 

Finally that one cow says I will take care of this and approaches backing Tater off about 5 ft from gate.

From there it's a lot of smelling and head fakes. 

Beaver dam breeched and draining.  Finally got this metal plate freed from big angle iron work bench I am fixing up.  Thing weighs a ton.


Tom

Sent from my SM-G973U using Tapatalk

[wetwillie]

Did you move out to farm full time Tom?

[ben ji]

Ben Ji--I can tell you as an owner of a mini dachsund that if you get a mini (15lb<) it'll act badass but won't dive into that kind of danger. If you get a full sized one (+/_ 30lb) it very well might win the battle. Fun fact: weiners evolved over the years with the elongated body and long snout to be able to grab a badger face-to-face and keep the badger's sharp claws out of reach of the vitals. Drag him out. German farmer whacks the badger with a shovel.

I guess I shouldnt be surprised we have a wiener dog expert on this board. Do you know anyone that sells wiener dog/gsp mixes? I'm thinking something around taters size that can still help me hunt birds.

(Also I am lol'n thinking about a male wiener dog trying to hump a normal sized gsp female to create this awesome cross breed I really want)

[KST8FAN]

Did you move out to farm full time Tom?

Not yet.  Would be great, but probably a few years away



Tom

Sent from my SM-G973U using Tapatalk

[steve dave]

Man, that rules. I hate farming but maybe I won’t at some point?

[ben ji]

Man, that rules. I hate farming but maybe I won’t at some point?

It's your destiny SD. ben ji's dad wanted nothing more than to get off the farm and get his big city computer job but once he got older, all the kids moved out and he inherited some farmland he went right back to living that farm life.

[steve dave]

Man, that rules. I hate farming but maybe I won’t at some point?

It's your destiny SD. ben ji's dad wanted nothing more than to get off the farm and get his big city computer job but once he got older, all the kids moved out and he inherited some farmland he went right back to living that farm life.

oh, I will never in my entire life move back to MY farm. I will buy some other better non-shitty farm.